Which of the statements best captures the consequences

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Problem 1. In Year 4, that property was distributed to Simon. Which of the following statements best captures the consequences of this distribution?

A. Distributions are tax-deferred transactions; because no cash is distributed, neither the partners nor the partnership recognize gain on the distribution.
B. The partnership recognizes the precontribution gain; Simons basis in the property is increased by the amount of recognized gain.
C. Simon recognizes the precontribution gain and increases his basis in the partnership interest; the partnerships basis in other property is increased by the amount of recognized gain.
D. Rajesh recognizes the precontribution gain and increases his basis in the partnership interest; Simons basis in the distributed property is increased by the amount of recognized gain.
E. Rajesh recognizes the precontribution gain and increases his basis in the partnership interest; the partnerships basis in other property is increased by the amount of recognized gain

Reference no: EM132965202

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